Airlines might complain of diminishing margins in profit. But its airport counterparts can’t have the same gripe – at least in Australia.
The Australian Competition and Consumer Commission (ACCC) has released its annual Airport Monitoring Report, and the analysis makes for good reading if you’re in the airport business, but perhaps not for customers, especially those that need to pay for parking.
The report shows Brisbane, Melbourne, Perth and Sydney airports “all significantly increased their profits” from aeronautical activities in 2016-17, with the four hubs earning a combined $757.6 million in operating profits (EBITA) – or a rise of 9.9% in real terms year-on-year.
“It is not surprising that the airports are so profitable, given that they face little competitive pressure and no price regulation,” ACCC Chairman Rod Sims said.
“Profits per passenger have also risen at each of the four airports and travellers are paying for this through higher ticket prices.
“Unconstrained monopolies often have an incentive and ability to charge excessive prices while lacking strong incentives to improve services.”
According to Sims, the four major airports are handling 30 million passengers a year more than they did a decade ago, but the hubs “appear to be dealing with the challenge of congestion, and three of the four airports are in the process of either constructing or planning a new runway”.
Whilst Sydney Airport makes the most money, earning $360 million in profit last year, it isn’t considered the best facility in the report. That honour goes to Perth Airport, which overtook Brisbane Airport with the highest overall quality rating of the four hubs.
“It is clear that Perth Airport’s investment program over the past few years has significantly improved the quality of the airport in the eyes of both airlines and passengers,” Sims said.
Parking, particularly at SYD, which earned $97 million from car parking operations with an operating profit margin of 71.9% of revenues, remains a huge source of income for the country’s largest hubs – and a huge area of contention for visitors.
Mr Sims suggests booking online or seeking out nearby independent car park operators to save money.